The relationship between the U.S. and China has deteriorated over the last four years. Barely missing a beat from the coronavirus pandemic, China is the only major world economy to post positive growth during the pandemic period, at a rate of 10% at that. China is now 1/6th larger than the U.S. economy measured by Purchasing Power Parity (PPP), and is projected to outpace the U.S. economy by 135% in just three years’ time, by 2024. China, moreover, has almost completely displaced the U.S. as the lead trade partner for most nations around the world, toppling the U.S. from that perch with Germany just last year. And China, as the new Asia Pacific Hegemon, recently formed the Regional Comprehensive Economic Partnership, with virtually all Asia Pacific nations, including historically Japan and Korea. Joining Michael for this conversation is Seoul, Korea based Paul Kim, to explore the potential turbulence between a once-hegemonic U.S. and the now-hegemonic China. Paul also shares updates from other Asian countries that might affect multinationals doing business in Asia.
Paul is graduated in Economics from the University of Chicago, with highest honors, and obtained his Juris Doctorate degree from Harvard University. Paul currently serves in private practice as a Corporate Partner in Sheppard Mullin’s Seoul office advising clients on cross-border mergers and acquisitions (M&A), private equity, venture capital and securities transactions, restructurings and multi-jurisdictional disputes.
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What We Discussed in This Episode:
- What is the global perspective on China’s economic assent juxtaposed to the U.S. “disintegration”?
- Did the coronavirus accelerate China’s growth?
- Is Purchasing Power Parity (PPP) a better measure of economic power?
- What does the recently signed Regional Comprehensive Economic Partnership (RCEP) trade agreement symbolize in the Asian region?
- What does the RCEP accomplish for signatory countries?
- How will the Biden administration deal with Asia now that it has been entirely excluded from the Trans-Pacific Partnership (TPP) it once worked for decades to initiate?
- How can multinational companies integrate into the Chinese economy now and take advantage of business opportunities generally and under the RECP?
- How are Japan and Korea performing economically in this pandemic era and what sectors are booming in those countries?
Resources Mentioned:
Graham Allison article - “China is Now the World’s Largest Economy. We Shouldn’t Be Shocked.”